Hong Kong SMBs not tapping green demand

Efforts to mitigate climate risks mainly on cutting energy use, with few small and midsize firms actively investing in green products and services despite expected increase in market demand, new study reveals.

With concerns over the impact of climate change increasing  among small and midsize businesses (SMBs) in Hong Kong, these enterprises have focused efforts mainly on lowering their own energy use. But few have looked at making energy-efficient, low-carbon products and services--despite their own projection of growing market demand green offerings.

Released Tuesday, the second Hong Kong Business Survey on Energy Efficiency and Climate Change revealed that over 70 percent of SMBs anticipated the impact of climate change to affect their businesses over the next three years, such as the rising cost of power, weather events, and disruptions due to pandemics, and infectious diseases.

The study polled some 300 SMBs in Hong Kong between September and October last year, and was conducted by research firm Ipsos, on behalf of the Climate Change Business Forum (CCBF).

Nearly three quarters of respondents were already taking action to address climate risks, with such efforts focused mainly on cutting energy consumption. The study also found that 53 percent focused on reducing energy consumption in the supply chain, while 36 percent looked at setting energy or carbon reduction targets in their operations.

The report also highlighted very few SMBs were embracing new market opportunities, as there was a "sizeable gap between perceived opportunity and action". Some 69 percent of respondents said they anticipated demand for green products and services to grow over the next three years, but only 12 percent said they were actively developing energy-efficient, low-carbon products and services.

Ipsos noted that market demand for green products and services currently stood at 14 percent.

"We're on a one-way journey to a carbon-constrained, energy-constrained world," Thomas Ho, chief executive of Gammon Construction, and executive committee chair of CCBF, said in the report.

"Hong Kong SMBs have been building their defense: cutting energy use. Now it is time to bring out the offense: green products and services for the emerging low-carbon economy."

The survey findings also indicated that respondents were looking for more government involvement in this market. About 48 percent were familiar with Hong Kong's proposed carbon reduction target, 58 percent of which said the government should be more ambitious.